ANNEX B

Mark up of Draft Policy and Performance Standards on

Social and Environmental Sustainability
(Against April 30, 2006 Version)

Track Changes References:

Insertions: Underline

Deletions: Strikethrough

Moved from: Double strikethrough

Moved to: Double underline

International Finance Corporation

April 14, 2010

 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

Introduction

1. Performance Standard 6 recognizes that protecting and conserving biodiversity, the maintenance of ecosystem
services, and the sustainable management of natural resources are —the variety of life in all its forms, including
genetic, species and ecosystem diversity—and its ability to change and evolve, is fundamental to sustainable
development. BThe components of biodiversity, as defined in the Convention on Biological Diversity, is the variability
among living organisms from all sources including, terrestrial, marine, and other aquatic ecosystems and the
ecological complexes of which they are a part. This includes diversity within species, between species, and of
ecosystems. include ecosystems and habitats, species and communities, and genes and genomes, all of which have
social, economic, cultural and scientific importance. This Performance Standard reflects the objectives of the
Convention on Biological Diversity to conserve biological diversity and promote the use of renewable natural
resources in a sustainable manner. This Performance Standard addresses how clients can avoid, reduce, restore,
and offset or mitigate impacts onthreats to biodiversity arising from their operations as well as sustainably manage
1
renewable natural resources and ecosystem services.

Objectives

To protect and conserve biodiversity

To ensure the continuance of benefits arising from ecosystem services

To promote the sustainable management and use of natural resources through the adoption of
practices that integrate conservation needs and development priorities

Scope of Application

1.2. The applicability of this Performance Standard is established during the sSocial and eEnvironmental
Assessmentrisks and impacts identification process, while the implementation of the actions necessary to meet the
requirements of this Performance Standard is managed through the client’s sSocial and Eenvironmental
Mmanagement Ssystem. The assessment and management system requirements are outlined in Performance
Standard 1.

2.3. Based on the Assessment of risks and impacts identification process onand the vulnerability of the biodiversity
and the natural resources present, the requirements of this Performance Standard are applied to projects (i) located
2
in all habitats, regardless of whether or not those habitats have been modified or not, orpreviously disturbed and
whether or not they are legally protected or designated areas or not; (ii) in areas providing critical ecosystem
3
services to Affected Stakeholders and/or to the project; and (iii) whose objective includes the extraction of natural
resources (e.g., forestry, fisheries).

Requirements
General

3.4. In order to avoid, and if avoidance is not possible then to or reduceminimize and restore adverse impacts to
biodiversity and ecosystem services in the project’s area of influence (see Performance Standard 1), paragraph, the

1
Ecosystem services are defined as provisioning services (such as food, freshwater, shelter, and timber), regulating services (such
as surface water purification, carbon storage and sequestration, climate regulation, and protection from natural hazards), and
natural cultural services (such as cultural heritage and sacred sites), which are linked to biodiversity.
2
As a general rule, modified habitat does not include urban areas, industrial, and other brownfield sites.
3
Critical ecosystem services are defined as those provisioning services necessary for sustaining the project or the survival,
sustenance, livelihood, or primary income source of Affected Stakeholders.

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 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

client will assess the significance of project impacts on all levels of biodiversity and ecosystem services as an integral
part of the social and environmental risks and impacts identification process. The risks and impacts identification
process should consider direct and indirect project-related impacts on biodiversity and ecosystem services and
identify residual impacts.

5. The Assessment will take into account the differing values attached to biodiversity by specific stakeholders, as
well as identify impacts on ecosystem services. The Assessment risks and impacts identification process will focus
on the major threats to biodiversity and priority ecosystem services, , such aswhich include habitat loss, degradation
and fragmentation, destruction and invasive alien species, overexploitation, water scarcity, nutrient loading, pollution,
and climate change. The Assessment risks and impacts identification process will take into account the differing
values attached to biodiversity and ecosystem services by specific stakeholders, as well as identify impacts on
ecosystem services. Wheren requirements of paragraphs 14–17 of this Performance Standard are applicabley, the
client will retain qualified and experienced external experts to assist in conducting the Assessment risks and impacts
identification process, which should consider project-related impacts across the potentially affected landscape or
seascape.

6. Where there is a loss or diminution of an ecosystem service upon which the project depends, or where the
company’s project-related impacts are likely to negatively impact the availability of an ecosystem service to Affected
4
Stakeholders, , the client will identify and prioritize those services as part of the risks and impacts identification
process. Adverse impacts on priority ecosystem services should be avoided, and if these impacts are unavoidable,
the client will meet the following requirements:

Reduce adverse impacts and implement restoration measures that aim to maintain the value and
functionality of such services.

Where the loss or diminution of a critical provisioning service is experienced by Affected Stakeholders as a
result of project implementation, that loss/diminution will be addressed through Performance Standards 1
and 5.

Where the loss or diminution of a critical cultural service is experienced by Affected Stakeholders, that
loss/diminution will be addressed under Performance Standard 8.
4.

Protection and Conservation of Biodiversity

General
7. Habitat is defined as a terrestrial, freshwater, or marine geographical unit or an airway passage that supports
complexities of living organisms and their interactions with the non-living environment. For the purposes of
implementation of this Performance Standard, hHabitats arecan be divided into modified, natural, and critical.

5 6
5. For protection and conservation of the biodiversity, the mitigation hierarchy includes biodiversity offsets.
8.
In order to avoid or minimize adverse impacts to biodiversity in the project’s area of influence (see Performance
Standard 1, paragraph 5), the client will assess the significance of project impacts on all levels of biodiversity as an
integral part of the Social and Environmental Assessment process. The Assessment will take into account the
differing values attached to biodiversity by specific stakeholders, as well as identify impacts on ecosystem services.
The Assessment will focus on the major threats to biodiversity, which include habitat destruction and invasive alien

4
As defined in Performance Standard 1.
5
As defined in Performance Standard 1, the mitigation hierarchy is to avoid adverse impacts, reduce significant impacts when
avoidance is not possible, restore significant impacts when both avoidance and minimization is not possible, and offset significant
residual impacts as a last resort.
6
Biodiversity offsets are measurable conservation outcomes resulting from actions designed to compensate for significant adverse
biodiversity impacts arising from project development and persisting after appropriate avoidance, minimization and restoration
measures have been taken. Generally, these are not within the project site.

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 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

species. When requirements of paragraphs 9, 10, or 11 apply, the client will retain qualified and experienced external
experts to assist in conducting the Assessment.
Habitat
1. Habitat destruction is recognized as the major threat to the maintenance of biodiversity. Habitats can be divided
into natural habitats (which are land and water areas where the biological communities are formed largely by native
plant and animal species, and where human activity has not essentially modified the area’s primary ecological
functions) and modified habitats (where there has been apparent alteration of the natural habitat, often with the
introduction of alien species of plants and animals, such as agricultural areas). Both types of habitat can support
important biovidersity at all levels, including endemic or threatened species.
6.
Modified Habitat
7.9. Modified habitats are those that may contain a large proportion of plant and/or animal species of non-native
7
origin, or where human activity has substantially modified the area’s primary ecological functions. . Modified habitats
include agricultural areas, forest plantations, reclaimed coastal zones, and wetlands.

Modified Habitat
8.10. IIn areas of modified habitat, the client will exercise care to minimize reduce any additional conversion or
degradation of such habitat., and will, depending on the nature and scale of the project, identify opportunities to
enhance habitat and protect and conserve biodiversity as part of their operations.

Natural Habitat
11. Natural habitats are those (i) composed of viable assemblages of plant and/or animal species of largely native
origin, and/or (ii) where human activity has not essentially modified the area’s primary ecological functions.

8
9.12. In areas of natural habitat, the client will not significantly convert or degrade such habitat, unless the
following could be demonstrated conditions are met:

No other viable alternatives within the region exist for development of the project on modified
habitat

Adequate conservation measures will be implemented within the project site, which may include the
9
identification and protection of set-asides

There are no technically and financially feasible alternatives

The overall benefits of the project outweigh the costs, including those to the environment and
biodiversity

Any conversion or degradation is appropriately mitigated according to the mitigation hierarchy

10.13. Mitigation measures will be designed to achieve no net loss of biodiversity where feasible, and may include
a combination of actions, such as:

Post-operation restoration of habitats

Implementation of biodiversity oOffsets, such as of losses through the creation of ecologically
10
comparable area(s) that areis managed for biodiversity

Investment in a relevant and credible offset banking scheme

Implementation of measures to reduce habitat fragmentation, such as biodiversity corridors

7
This excludes habitat that has been converted in anticipation of the project.
8
Significant conversion or degradation is: (i) the elimination or severe diminution of the integrity of a habitat caused by a major,
long-term change in land or water use; or (ii) modification of a habitat that substantially reduces the habitat’s ability to maintain
viable population of its native species.
9
Set-asides are land areas within the project site that are excluded from development and are targeted for the implementation of
conservation enhancement measures. Set-asides will likely contain biodiversity attributes and/or provide ecosystem services of
significance at the national and/or regional level.
10
During offset development, cClients will respect the ongoing usage of proposed offset sitessuch biodiversity by Indigenous
Peoples or traditional communities.

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 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

Compensation to direct users of biodiversity

Critical Habitat
11.14. Critical habitat is a subset of both natural and modified habitat that deserves particular attention. Critical
habitat includes areas with high biodiversity value,11, including areas with the following criteria: (i) habitat of
;12
significant importance to Crequired for the survival of critically Eendangered and/or Eendangered species, , areas
having special significance for endemic and/or restricted-range species,; and sites that are critical for the survival of
migratory species; areas supporting globally significant concentrations of migratory species, and/or or numbers of
individuals of congregatory species; (ii) areas with regionally unique and/or highly threatened ecosystems; and (iii)
areas assemblages of species or which are associated with key evolutionary processes or provide key ecosystem
services; and areas having biodiversity of significant social, economic or cultural importance to local communities.

12.15. In areas of critical habitat, the client will not implement any project activities unless the following
requirements are met:

There are no measurable adverse impacts on the criteria for which the critical habitat was
designated and on the ecological processes supporting that criteria the ability of the critical habitat
to support the established population of species described in paragraph 9 or the functions of the
critical habitat described in paragraph 9

The project is not anticipated to lead to a net There is no reduction in the global or national/regional
13
population of any recognized Ccritically Eendangered or Eendangered species over time

Any lesser impacts are mitigated in accordance with paragraph 8

The client has implemented a robust biodiversity monitoring program

All other impacts are mitigated in accordance with the mitigation hierarchy

16. In areas of critical habitat, biodiversity offsets will be designed to achieve net positive gain of the relevant criteria
described in paragraph 14 of this Performance Standard.

Legally Pprotected and Designated Areas

14
13.17. In circumstances where a proposed project is located within a legally protected area, or an internationally
15 16
designated area, the client, in addition to the applicable requirements of paragraphs 12, 13 and 15 10 above, will
meet the following requirements:

Demonstrate that any proposed development in such areas is legally permitted

Act in a manner consistent with any government recognized defined protected area management
plans for such areas

Consult protected area sponsors and managers, local communities, Indigenous Peoples and other
key stakeholders on the proposed project, as appropriate

11
Such as areas that meet the criteria of the World Conservation Union (IUCN) classification.
12
As defined by the IUCN Red List of Threatened Species - available at www.iucnredlist.org. or as defined in any national
legislation.
13
As defined by the IUCN Red List of Threatened Species or as defined in any national legislation.
14
An area may be designated as legally protected for different purposes. This Performance Standard refers to legally protected
areas designated for the protection or conservation of biodiversity, including Includes areas proposed by governments for such
designation.
15
This includes UNESCO World Heritage Site, UNESCO Man and the Biosphere Reserves, Key Biodiversity Areas (KBAs) and
wetlands designated under the Convention on Wetlands of International Importance (the Ramsar Convention).
16
If the primary management objectives of the legally protected or designated area are comparable with the management
objectives as described for IUCN Management Categories Ia, Ib and Category II when these areas are designated for the protection
or conservation of biodiversity.

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 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

Implement additional programs, as appropriate, to promote and enhance the conservation aims
and effective management of the protected or designated area

Invasive Alien Species

14.18. Intentional or accidental introduction of alien, or non-native, species of flora and fauna into areas where they
are not normally found can be a significant threat to biodiversity, since some alien species can become invasive,
spreading rapidly and out-competing native species.

19. The client will not intentionally introduce any new alien species (not currently established in the country or region
of the project) unless this is carried out in accordance with the existing regulatory framework for such introduction, if
such framework is present. All introductions of alien species will be, or is subject to a risk assessment (as part of the
client’s sSocial and eEnvironmental Assessmentrisks and impacts identification process) to determine the potential
for invasive behavior. The client will not deliberately introduce any alien species with a high risk of invasive behavior
or any known invasive species and will exercise diligence to prevent. The client will implement measures to avoid the
potential for accidental or unintended introductions including transportation of substrates and vectors (such as soil,
ballast, and plant materials) which may harbor invasive alien species. (as part of the client’s Social and
Environmental Assessment).

15.20. Where invasive alien species are already established in the country or region of the proposed project, the
client will exercise diligence in not spreading them into areas in which they have not already been established, and,
as practicable, eradicating such species from the natural habitats in which the client has management control.

Management and Use of Renewable Natural Resources

21. Renewable natural resources are broadly defined to include natural and plantation forests, soil-based agriculture
17
for annual and perennial crops, aquaculture, and capture fisheries. The client will manage renewable natural
resources in a sustainable manner. . Where possible, the client will demonstrate the sustainable management of the
resources through an appropriate system of independent certification. available, the client will verify sustainable
management practices through independent certification to an internationally-recognized standard. Applicable
international standards are those developed that are objective and achievable, are founded on a continuous
consultative process with relevant stakeholders, and are applied through independent and accredited certifying
18
bodies.

16.22. In particular, plantations, forests and aquatic systems are principal providers of natural resources, and need
to be managed as specified below.

Natural and Plantations and Natural Forests

17.23. Clients involved in any plantation development, including forest plantations, or in natural forest harvesting or
plantation development will not cause any conversion or degradation of critical habitat or areas identified as High
19
Conservation Value (HCV). Where feasible, the client will locate plantation projects on modified habitat unforested
land or land already converted (excluding land that is converted in anticipation of the project). Clients will respect cut-
off dates for conversion of natural habitats established by applicable standards and certification systems. In addition,
the client will ensure that all natural forests and forest plantations over which they have management control employ

17
Renewable natural resources includes only “living” or “biotic” resources. It does not include solar, wind or water resources, for
example.
18
An appropriate certification system would be one which is independent, cost-effective, based on objective and measurable
performance standards and developed through consultation with relevant stakeholders, such as local people and communities,
indigenous peoples, civil society organizations representing consumer, producer, and conservation interests. Such a system has
fair, transparent, independent decision-making procedures that avoid conflicts of interest.
19
HCV areas are land areas identified using internationally recognized guidelines as provided by the HCV Resource Network.

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 Performance Standard 6 – Rev 0.1
Biodiversity Conservation and Sustainable Natural Resource
Management
March 26April 14, 2010

sustainable management practices that are verified through are independently certificatoioned asin meeting
performance standards conditions compatible with internationally accepted principles and criteria for sustainable
20
forest management. Where a pre-assessment determines that the operation does not yet meet the requirements of
such an independent forest certification system, the client will develop and adhere to a time-bound, phased action
plan for achieving such certification.

Freshwater and Marine Systems

18.24. Clients involved in the production and harvesting of fish populations or other aquatic species must
demonstrate that their activities are being undertaken in a sustainable manner, as verified through independent
certification to an through application of an internationally accepted standardsystem of independent certification, if
available, or through appropriate studies carried out in conjunction with the sSocial and eEnvironmental aAssessment
pprocess.

Supply Chain
25. Where the resource utilized is ecologically sensitive, clients should give preference to purchasing products,
21
including renewable natural resources, from primary suppliers that have verified sustainable management practices.
The adverse impacts associated with ecologically sensitive supply chains will be considered where there is a
potential risk that primary suppliers are overexploiting areas of critical habitat or HCV.

20
See footnote 7.
21
Primary suppliers are first-tier suppliers who are providing goods or materials essential for the core business function.

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